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Comment by Hermel | Hacker News Reader

Plausibly inaliable property rights.

With central servers (and today's banking system), the government can freeze bank account. Even if today's laws would prohibit that, there is no guarantee that this will also be the case in the future. Thus, the only way to plausibly guarantee that the government won't freeze your digital assets, is by issuing them on a decentralized infrastructure under the control of the public (e.g. as colored coins on the Bitcoin blockchain).

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You still can freeze accounts. You merely maintain a list of "frozen" addresses, and anyone who accepts payment from them is guilty of a crime. It's actually much easier in this scenario.

Consider that wallets can be created on the fly and coins tumbled, finding the owner of a newly-created wallet is impossible until they do something else with those coins.

Make it illegal to create a new wallet without central authority approval and illegal to tumble coins. Closed those "loopholes" that "only criminals use" and the majority of people who know nothing about how bitcoin works would agree that it's not bad to do that.

Once nobody can tumble legitimately then quite literally only the criminals will tumble and there you go.

Now, as this central authority, invent a way to distinguish between "tumbling" and normal transactional flow.

Really, you can dictate whatever you want as this central authority, but enforcing it is a whole different matter.

"If it's going to a registered account, it's normal transaction flow. If it's going to an unregistered account, it's illegal. If any funds are received from an unregistered account, they must be sent to an address provided by the central authority, or it's illegal. Registered accounts are signed periodically by the central authority and certificates can be verified automatically at transaction time."

Central authorities already distinguish cash transactions with illegitimate intent (e.g. for smuggling or money laundering) and legitimate cash transactions. It's not a big stretch to think of tumbling being treated as a form of money laundering, where the nature of the transaction may be wholly legitimate, but the criminality is based on the intent of the transaction.

> anyone who accepts payment from them is guilty of a crime

That could never happen in a free country.

Also there's nothing stopping someone from evaporating the coins via mining fees. So you'd have to have dictatorial control over all miners as well.

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